Corruption in Myanmar: take down the real villains

Instead of focusing on low-salaried bureaucrats as the main cause of graft, advocates need to go after those at the very top of the centres of power

When I started to write about anti-corruption issues in Myanmar on the East Asia Forum, a number of scholars suggested that corruption in Myanmar is principally linked with low wages at governmental institutions. But the logic that the low salaries of public officials increases the amount of corruption does not work accurately in Myanmar. What about corruption among the state's leadership? There are many factors which underpin corruption in Myanmar, such as the lack of a robust political system, weak governmental institutions, opportunity for corruption, monopolistic leadership mechanisms and a moral and value system based on corruption.

Whenever there is a power struggle among the elite generals who have ruled since 1962 in Myanmar, they accuse each other of corruption. After that, they boot each other out by using corruption as a reason. The members of the Myanmar Investment Commission were fired in 1999 and the ex-prime minister Khin Nyunt and his military intelligence officers were dumped in 2004. The fact is that Senior General Than Shwe is alleged to be the most corrupt general since the country gained independence. He created a legacy of corruption and decades of his authoritarian rule invented the military cronyism that is based on a commercial relationship between the generals and their cronies. Than Shwe and his ministers awarded special privileges to certain crony companies, which in return provided illegal money to the generals. 

Due to economic sanctions by the western democracies, the junta needed foreign exchange and hard currency for overseas transactions and trade. The leading ministers accepted large sums in illegal contributions from cronies, who in return were given major state contracts by the military junta. The more the cronies increased their profits from these licences and contracts, the more financial and political power they had in shaping and/or influencing the country's decision and policy-making mechanisms.

Recently, WSJ and Reuters cited a World Ultra Wealth Report by Wealth-X, which reports that Myanmar has 40 billionaires who have more than US$3 billion dollars in wealth. Meanwhile, the World Bank reports that 76 per cent of the population has no electricity and 26 per cent live under the poverty line. 

The Thein Sein administration runs an economy without any budgetary plans or fiscal discipline, although his administration is supposed to be reform-minded. No one knows how much donors donate to the country or how much money the country has borrowed from international financial institutions. No wonder Myanmar is continually defined as the most corrupt country by anti-corruption organizations, with many indexes citing crony corruption, corruption in the resources extraction sector and election fraud.

Land confiscations by the ruling elite and their cronies are widespread and systematic, as there is still no rule of law or transparent institutions. That is why the major problem of corruption in the economy is because there is no separation of powers between the executive, legislative and judicial systems. With the top people in power corrupt, how can we put all the blame on low-wage public servants? Donors and global movers and shakers must speak out against the corruption of Myanmar's leadership, to firmly set up a rule-of-law mechanism.

Although the Thein Sein administration is undertaking reforms, the military and executive are above the law. The 2008 constitution is utterly rubbish, as the judiciary is not independent, although the Thein Sein administration set up an independent Central Bank of Myanmar. All judicial institutions and the security sectors need to be improved, as most judges, lawyers, courts, policemen, intelligence and prison wardens are notoriously corrupt. More than 10,000 former political prisoners and recent political prisoners were sentenced, for demanding democracy and human rights, by those same judges and courts under the military junta. How it can we say there is the rule of law in Myanmar while the ministers and their cronies monopolise power and resources? 

Thein Sein's centralised reforms require cronies to lobby the administration in order to receive favourable treatment by state officials, thereby fuelling a corrupt relationship between executive officers and cronies. As Thein Sein's reform decisions are strategically ordered, there is no room for political parties and activists to participate in the policy-making processes. As a result, cabinet ministers and cronies are the most corrupt people in society, as there is no independent judicial system, separation of powers or rotation system. Reforms in Myanmar must be based on policy competition in order to create real reform. The nation needs to introduce robust fiscal discipline and decentralisation, and an independent anti-corruption agency that can monitor, educate and investigate corruption at all layers of society, particularly cabinet ministers, cronies, politicians and public officials. 

When the government starts to expand big institutional mechanisms, new positions create greater opportunities for ministers, cronies and public officials to seek private gains. The opportunity for corruption is a bigger incentive than the punishment is a deterrent because Myanmar has no independent justice sector.

The people of Myanmar deserve a minimum standard of government in which administrative power must be limited, thereby reducing opportunities for corruption among ministers, cronies and public servants. The more administrative and executives services are centralised, the more opportunities for the abuse of power and bribery and corruption. For example, during the authoritarian era of Than Shwe, gas, oil and mining projects in Myanmar were followed by atsunami of corruption in the Ministry of Energy, which is the largest corrupt ministry and which also contributes the largest share of GDP, followed by the Ministry of Mines and the Home Ministry.

The solutions are to set up an independent anti-corruption agency and judiciary; to apply fiscal discipline and budget transparency; to apply competition policy in all sectors, especially in respect to policy and decision making; and to initiate a decentralisation policy whereby the national government must share power and respect local governments that can manage their affairs themselves. 

Now is the time to transfer power and economic resources to sub-national and local governments. They should design an investment strategy to attract national and foreign investments in their respective regions in order to reduce corruption in Myanmar. 

Naing Ko Ko is a visiting scholar at the Regulatory Institutions Network, the Australian National University.